First time buyer mortgage drought dries up hopes for 65% of would-be homeowners

26 May 2009 / by Rachael Stiles

Dreams of owning their own home will remain just that as far as 65 per cent of would-be first time buyers are concerned, as they think that too many obstacles stand between them and homeownership.

New research from property website PropertyLive.co.uk has found that the majority of potential buyers have given up on becoming homeowners, as many mortgage lenders continue to demand high deposits and perfect credit from first time buyer mortgage customers.

Despite plummeting house prices, which have fallen 17.7 per cent compared to this time last year, according to the latest house price index from Halifax, and record low interest rates, which currently stand at jut 0.5 per cent, most non-homeowners expect to remain as such.

Of those would-be home buyers who are still holding out hopes of eventually getting a foot on the property ladder, five per cent expect to wait more than five years to get a mortgage.

Another 14 per cent estimate that they could be buying a home in two to five years' time, while 10 per cent believe it will take them between one and two years, and a further five per cent expect to become property owners in the next six months to a year.

Commenting on the research, Peter Bolton King, chief executive of the National Federation of Property Professionals (NFoPP), which regulates PropertyLive.co.uk, said: "With banks still refusing to lend and the Government doing practically nothing to help first-time buyers, it’s little wonder that so many people have given up hope of every owning their own home.

"First-time buyers are the bedrock of a healthy housing market," he continued, adding that the Chancellor Alistair Darling didn't do more in his Budget last month to help them onto the property ladder, such as scrapping Home Information Packs, and extending the stamp duty holiday for the rest of the market.

"In failing to do that he dashed the hopes of thousands of hard-working people who are saving in the hope of getting the keys to their own home," he said.